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Markets for ideas: prize structure, entry limits, and the design of ideation contests

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  • Pavel Kireyev

Abstract

I develop an empirical model of idea generation contests with heterogeneous participants and endogenous entry, fit the model to data from a platform used by major advertisers, and simulate counterfactual contest designs. The empirical model resolves ambiguous predictions yielded by contest theory about the effects of different prize structures on contest outcomes. Simulations reveal the impact of strategies that hold fixed total award and balance competition by handicapping advantaged participants. Increasing the number of prizes while restricting the number of prizes per participant can improve outcomes for the platform. The results provide guidance for the design of large contests.

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  • Pavel Kireyev, 2020. "Markets for ideas: prize structure, entry limits, and the design of ideation contests," RAND Journal of Economics, RAND Corporation, vol. 51(2), pages 563-588, June.
    • Handle: RePEc:bla:randje:v:51:y:2020:i:2:p:563-588
    DOI: 10.1111/1756-2171.12325
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    1. Konstantinos I. Stouras & Jeremy Hutchison-Krupat & Raul O. Chao, 2022. "The Role of Participation in Innovation Contests," Management Science, INFORMS, vol. 68(6), pages 4135-4150, June.
    2. Fu, Qiang & Wu, Zenan & Zhu, Yuxuan, 2023. "On equilibrium uniqueness in generalized multi-prize nested lottery contests," Games and Economic Behavior, Elsevier, vol. 139(C), pages 180-199.
    3. Aline Fugeray-Scarbel & Stéphane Lemarié, 2024. "The amplified effect of market size on innovation: A comparative analysis of pea and wheat seed value chains in France," Post-Print hal-04631965, HAL.
    4. Vivek Bhattacharya, 2021. "An Empirical Model of R&D Procurement Contests: An Analysis of the DOD SBIR Program," Econometrica, Econometric Society, vol. 89(5), pages 2189-2224, September.
    5. Fugeray-Scarbel, Aline & Lemarié, Stéphane, 2024. "The amplified effect of market size on innovation: A comparative analysis of pea and wheat seed value chains in France," Agricultural Systems, Elsevier, vol. 219(C).

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